Lancey v. Foss

• Decision Date: 13 September 1895
• Citation: 88 Me. 215,33 A. 1071
• Parties: LANCEY v. FOSS et al.
• Court: Maine Supreme Court

33 A. 1071

88 Me. 215

LANCEY

v. FOSS et al.

Supreme Judicial Court of Maine.

Sept. 13, 1895.

(Official.)

Assumpsit by William K. Lancey against Obed Foss and another, executors of Going Hathorn, deceased. The action was commenced in 1878, and subsequently, in that year, the plaintiff was declared a bankrupt, upon his own petition, in the district court of the United States for the district of Maine. A schedule of his assets was filed in said court, which did not include the claims mentioned in the writ, and an assignee was chosen and appointed. Thereafter, by decree and assignment of the register in bankruptcy, all the estate of the bankrupt was assigned to the assignee under the United States bankrupt act of 1867. The assignee never appeared in the action, and subsequently the bankrupt was discharged by the district court. It is agreed that, if the action can be maintained, it shall stand for trial, and that otherwise a nonsuit shall be entered. Action to stand for trial.

S. S. Hackett, for plaintiff.

D. D. Stewart, for defendants.

EMERY, J. The statement of the case shows that the plaintiff is entitled to a hearing in this court upon the merits of his claim against the defendants, unless he is prevented by some provision of the United States bankruptcy act of 1867, to which he had become subject by the bankruptcy proceedings. The defendants contend that he is thus prevented by several provisions of that act.

1. Rev. St. U. S. tit. "Bankruptcy," § 5046, provides that all of the property of the bankrupt, including all choses in action, all debts due him, all rights and causes of action (with certain exceptions not material here), "shall in virtue of the adjudication in bankruptcy and the appointment of his assignee, be at once vested in the assignee." Section 5047 provides that the assignee may be admitted to prosecute in his own name, or that of the bankrupt, any suit pending at the time of the adjudication. This suit and the subject-matter of it are clearly within these sections.

Upon these sections and the bankruptcy proceedings the defendants base a vigorous argument, that the plaintiff was completely shorn of all title and interest in this action and its subject-matter; that the entire title and interest, ipso facto, passed to the assignee, leaving nothing in the bankrupt plaintiff; that the latter became civiliter mortuus, and lost the power of maintaining actions upon then existing claims as completely as one physically deceased. There are various expressions and dicta of judges which seem to state the operation of the statute as broadly as do the defendants, but we are not referred to any express decision going so far upon the language of this particular act.

Undoubtedly, by the operation of the bankruptcy proceedings under this act, the assignee is vested with the full right to take all the estate of the bankrupt, whether scheduled or not, and is nested with sufficient power and title to fully administer it in his own name, or that of the bankrupt, as he may elect. But all such property of a bankrupt is not cast upon the assignee nolens volens, like the personal property of a deceased Intestate upon the administrator. In the latter case the title cannot remain with the deceased, but must fall on his successor. The assignee of a living bankrupt, however, may decline to take or interfere with such property as he deems onerous or worthless. The property so rejected by the assignee does not thereby become derelict, to vest in the first appropriator. The rights and obligations which the assignee declines to enforce or notice do not thereby vanish into nothingness.

Such items of estate, corporeal or incorporeal, as the assignee declines to appropriate or utilize, remain the property of the bankrupt, subject, always, to the superior right and title of the assignee. Notwithstanding the adjudication and assignment under the bankrupt act, there is left in the bankrupt a right which makes a title good against all the world except his assignee and creditors. These may appropriate the entire title and interest, and so divest the bankrupt completely; but what they decline to appropriate remains with the bankrupt. The title does not fall to the ground between the two. If the assignee or creditors will not take it, no one else can appropriate it. The bankrupt can defend or enforce it against all others.

The above statement of the law is supported, directly or incidentally, by many judicial decisions: Evans v. Brown, 1 Esp. 170; Chippendale v. Tomlinson, 7 East, 57; Temple v. Railway Co., 2 Jur. 296; In re Stafford, 18 Wkly. Rep 959; Herbert v. Sayer, 5 Q. B. 965; Fyson v. Chambers, 9 Mees. & W. 460-466; Smith v. Gordon, 6 Law Rep. 313, Fed. Cas. No. 13,052; Amory v. Lawrence, 3 Cliff. 523, Fed. Cas. No. 336; Taylor v. Irwin, 20 Fed. 615; File Co. v. Garrett, 110 U. S. 288, 4 Sup. Ct. 90; Reynolds v. Bank, 112 U. S. 405, 5 Sup. Ct. 213; Laughlin v. Dock Co., 13 C. C. A. 1, 65 Fed. 447; Eyster v. Gaff, 91 U. S. 521; U. S. v. Peck, 102 U. S. 64; Thatcher v. Rockwell, 105 U. S. 467; Sparhawk v. Yerkes, 142 U. S. 1, 12 Sup. Ct. 104; Sessions v. Romadka, 145 U. S. 29, 12 Sup. Ct. 799; King v. Remington, 36 Minn. 15, 29 N. W. 352; Sawtelle v. Rollins, 23 Me. 196; Foster v. Wylie, 60 Me. 109; Nash v. Simpson, 78 Me. 142, 3 Atl. 53.

In this case at bar, the action, with its various counts upon promissory notes, merchandise sold, etc., was pending in the supreme judicial court for Somerset county at the time of the adjudication and assignment in bankruptcy. The claims here in suit were not scheduled by the bankrupt, but their existence, and...